Rover boss 'hopeful' after loan of £6.5m

MG Rover boss John Towers believes the car maker can still be rescued after the Government gave it a £6.5 million lifeline to enable it to pay its 6,100 workers for another week.

But hopes of a Chinese takeover were doubtful last night as a key division of Shanghai Automotive Industry Corporation (SAIC) told the Shanghai stock exchange its profits had more than halved in the first quarter of this year due to soaring steel prices and poor sales.

Trade Secretary Patricia Hewitt, administrator PricewaterhouseCoopers, Mr Towers and union leaders are prepared to fly to China to negotiate with SAIC, still seen as the most likely buyer of the Longbridge car manufacturer.

The Trade Secretary said the unsecured loan had been made to pay expenses and wages so the company could be kept afloat while a deal was under negotiation. The Government will review the company's position after the week.

Opposition parties are cynical about the loan, saying the Government just wants to avoid thousands of job losses in the West Midlands before the general election on 5 May.

Workers have been told to turn up at the Longbridge plant today and are expected to attend mass meetings with union officials and the administrators while the production lines remain idle.